Lido Finance | Liquid ETH Staking with Lido | Lido DAO
Lido Finance- The best liquid staking solution for proof-of-stake crypto
When you invest in cryptocurrency, the only aim you have in your mind is to earn money through it by selling it at a price higher than the one at which you purchased it. But, do you know there is one more way through which you can earn money with your crypto?
Well, the short answer is through "Staking."
Yes, it is possible to put your crypto funds to work and earn a passive income through it and the best part is, you don't even have to sell them. But, crypto staking has also taken a step ahead and that became possible only because of the contribution made by Lido Finance.
Don't have an idea about it? Don't worry, the following sections will walk you through the complete details of this platform and what you can do to use it. So, if you wish to learn more about staking your assets through Lido Finance, come along with me and give a thorough read to the sections to follow.
What is Lido Finance?
Came into existence in the year 2020, the Lido Finance platform provides users with liquid staking solutions for those cryptocurrencies that support the Proof-of-Stake consensus mechanism. As you might know that Ethereum is now in the phase of "Merge" and has undergone an upgrade to the Ethereum 2.0 protocol, Lido Finance supports staking on this new version of the platform. It not only allows us to work on the Ethereum blockchain, but also supports staking on other platforms such as Solana, Kusama, Polkadot, Polygon, and more.
Don't understand much of what I am saying? Well, you can just go through the next section where I will make you understand the whole concept of how it works in the staking world.
How does Lido Finance work?
Staking is the name of participating in securing a network. Hence, liquid staking services like these are being trusted by a lot of new users and they ultimately stake their crypto assets through such platforms. In return for the same, they are provided with block rewards. But, the traditional Proof-of-stake mechanism comes with several hurdles. Hence, to reduce these hurdles, Lido Finance came into action thus reducing any barriers that might appear when entering the staking solution.
When you use this platform to stake your crypto assets, your tokens are staked on the Lido blockchain. Here are some of the key takeaways from Lido Finance:
First of all, it helps in the management of withdrawals and deposits made by the users
Alongside that, it also helps in the process of delegating the pooled funds to the eligible node operators
Additionally, Lido Finance also helps in calculating the staking rewards for Lido Liquid Ethereum (ETH) Staking
In addition to that, it also helps in minting and burning the tokens
Talking about Lido DAO, we can say that in order to aid the decentralized protocol governance, Lido launched a decentralized autonomous organization (DAO)that is responsible for making all the important decisions on the protocol’s operations.
Steps for Lido Liquid Ethereum (ETH) Staking
In order to stake your ETH through the Lido Finance platform, you can perform the following steps:
The first thing you are supposed to do is, visit its official website for staking i.e. stake.lido.fi
Now, find and select the "Connect Wallet" option
On the popped-up screen, agree to their Terms of Use and Privacy Notice
Thereafter, you can choose one of the given wallet options to connect with
Some of the available options are:
MetaMask
OKX Wallet
WalletConnect
Ledger
Coinbase
Trust Wallet, etc.
After connecting the wallet, you can view the balance available in it
Then, you can enter the amount of ETH you wish to stake and hit the "Stake" button
Now, you need to confirm the transaction using your connected wallet
As soon as you do this, your wallet will be funded with the stETH which represents your staked deposit
From now onwards, you can view your staking rewards on a daily basis
Way to Liquid Polygon (MATIC) Staking via Lido
Similarly, if you are looking for steps on Liquid Polygon (MATIC) Staking, then you can go to the https://lido.fi/ polygon website. Here you can select the "Stake MATIC" option present on the main page of the screen.
When the new screen opens, you can choose the option to connect your wallet with it. If you have already connected your wallet, then you can enter the amount of Polygon in the given form and then follow a few easy steps to complete the staking process.
Addressing some lido finance issues
Is lido finance not working the way you expect it to be? If that is the case, you must take some measures to get the issue fixed.
First of all, you need to make sure that you are only staking the supported crypto assets through it
In case their website is not opening at all, you should rectify the issue with your device or the internet connectivity on it
Apart from that, you also need to make sure that the platform has not reported any downtime or maintenance notice on its website
Summing it up:
When you stake your crypto assets through any platform other than Lido Finance, your assets are locked out for a set period. But, this is not the case with Lido as it is one of the best liquid staking solutions for proof-of-stake crypto. I hope this article has helped you gain comprehensive knowledge about this platform and its usage.
So, till next time, Happy Staking...
Frequently Asked Questions-
- What are the risks of Lido Finance?
As we know that Lido Finance works on the concept of "Distributed Custody", therefore when you lock your funds in smart contracts, there is a fear that this smart contract may get affected by bugs or have vulnerabilities in it that can be easily exploited by a hacker and loss of funds.
- Is Lido legit for staking?
Based on the reviews available on different platforms of the web, the platform Lido Finance has been extensively used for the purpose of staking ETH and earning passive income through it. Once you stake your ETH, the rewards are then applied to the stETH token balance. And you know what the best part is, you are rewarded every day at midnight.
- How does Lido make money?
Whenever traders stake their crypto assets through it, they are provided with some rewards in the form of their earnings. Lido Finance charges you a 10% fee for your earnings. This 10% fee is then shared by the Lido DAO and node operators. On Lido Finance, you can stake different crypto assets including ETH, SOL, DOT, KSM, and MATIC.
- Can you lose ETH in Lido?
Due to the unexpected and long-term absence of validators, the fear of loss of their staked funds develop in the mind of investors. When a specific validator goes offline for a long, you may eventually lose your funds. So, practicing caution while choosing a validator is a must.